A blog on issues affecting Australia's newsagents, media and small business generally.

Mark Fletcher on March 3, 2015 9:00 PM

Partwork Precious Rocks, Gems & Minerals was reissued in the UK in January as In Publishing reported recently. With the last go round finishing quite recently I can understand Aussie newsagents are angry at reissue here so soon.

There are space issues with many additional demands on space already confronting newsagents and challenging our focus.

The other issue is returns. I’d urge newsagents who have received excessive stock to demand the publisher fund freighting returns. It’s not your problem.

Mark Fletcher on March 3, 2015 6:42 AM

If you are a Melbourne-based newsagent you should try and get to Toy Fair over the next four days. It’s an excellent event with many large and small toy suppliers attending.

We are on a mission to grow toy sales in my newsagency. In the first two months of this year toys accounted for 3.59% of revenue where as a year ago for the same period they accounted for 1.64% of revenue – this in a business with overall revenue growth of 17%.

Toys are playing a key role in our continued GP shift. This is one reason the Toy Fair is an excellent event.

Mark Fletcher on March 3, 2015 6:38 AM

Click on the image and read a Facebook Post from Occupy Sydney about newsagents and what is happening with lotteries. Their 3,322 Facebook friends received this post in their timeline while their 11,600 Twitter followers received a link to this in their timeline.

Besides the inaccuracy of what they have written, I do not want to be identified with a channel others say will disappear in one part of the channel has one or two new competitors. Such as view, as I have written many times here before is, in my opinion, inaccurate.

While I do not want to see Coles and Woolworths get stronger, I don’t think we benefit from this type of shrill argument. Further, if a newsagency is so weak that it would close if Coles or Woolworths nearby got lotteries then the business is already in serious life-threatening trouble.

My call to newsagents is to fix the business now rather than waiting to react to something which only may happen.

Mark Fletcher on March 3, 2015 6:22 AM

With participating magazine publishers and distributors getting closer to trialling their proposed code of conduct, I am publishing here today what I publisherd here in November last year as I think the code of conduct is unfair on newsagents. I’ve made it clear I do not want to be part of a trial under this code as it is far too one-sided, it does not address the core magazine supply issues newsagents face.

Magazine Publishers Australia and representatives of Pacific Magazines, Bauer Media, Network Services and Gordon an Gotch have been working on a possible code opt conduct for the supply of magazines to newsagents. This work was initiated by the publishers and has been in discussion for a year.

Any code is a complex process because it must have approval from the ACCC. Even the suppliers talking together requires ACCC approval.

As I have written here many times, a code is essential for the competitiveness of newsagents. Most recently, on August 30, I published my suggested magazine supply KPIs – these were first presented to publishers at a breakfast meeting in 2005.

Newsagents need to be part of the discussion of any possible code of conduct. Here is a draft of the MPA code of conduct. It may not be a current draft. I am not positing it here as a declaration of what will be put in place. No, I am publishing it here so newsagents can comment more generally on the topic of KPIs.

If you compare this code of conduct to my suggested magazine supply KPIs you will see the MPA draft is biased to serve the publisher whereas mine is biased to serve the newsagent. I think the MPA code needs some more work but it is a start. For example, the financial viability of a title in a newsagency has nothing to do with the size of the print run … the ideal sales efficiency has nothing to do with the size of a print run.

I’d also note: early returns are essential to cash-flow management in newsagencies. If Network and Gotch want to be paid they must allow early returns. If a title has not sold in two weeks it ought to be a reasonable candidate for early return.

Publishers and distributors need to understand that delayed billing is of little benefit to newsagents.

Since we carry the space, labour and financial obligation, we need a supply model that allows us to take on such obligations.

2. Consecutive Nil Sales
A Distributor will cease to distribute a Title to a Retailer for a minimum of 12 months if the Title has experienced consecutive nil sales at that Retailer for, in the case of:
a) a weekly Title, six consecutive Issues;
b) a fortnightly or monthly Title, four consecutive Issues; and
c) any other Titles, two consecutive Issues.

3. Returns
A Distributor will not require Retailers to provide Full Copy Returns, except in relation to Partworks.
A Distributor may require that Retailers provide, at the Retailers’ expense, Mastheads as evidence of unsold copies of an Issue and may require that Retailers:
a) package such Mastheads separately from any permitted Full Copy Returns; and
b) clearly mark packages containing Mastheads or Full Copy Returns as ‘Mastheads’ or ‘Full Copy Returns’, as applicable.

4. Early Returns
A Distributor will not be required to accept Early Returns from Retailers, except where such Early Return is made by a Retailer to correct an error in allocations quantity.

5. Redistributions – Packs & singles
A Distributor will not Redistribute an Issue on more than once occasion.
If a Distributor Redistributes an Issue, the Distributor will ensure that:
a) the prior distribution of the Issue has Closed;
b) at the date of the Redistribution, less than 12 months has elapsed since the Recall Date applicable to the first distribution of the Issue;
c) the number of copies of the Issue provided to a Retailer is less than the number of copies provided to that Retailer as part of the first distribution of the Issue (unless the first distribution of the Issue was a sell-out at that Retailer); and
d) the On-sale Period for the Redistributed copies of the Issue is no more than three months.
If a Distributor Redistributes an Issue, the Distributor will use reasonable endeavours to ensure that:
a) the Issue does containing cover offers that have expired; and
b) if the Issue is bagged and no current Issue is included (e.g. a “Value Pack” of two old Issues), this is clearly communicated to consumers on the packaging.

6. New Titles
For each launch of a New Title, a Distributor will ensure that:
a) each Retailer receives notification of the launch prior to the On-sale Date for the Launch Issue; and
b) the number of copies of the Launch Issue distributed to each Retailer is determined reasonably having regard to the total print run of the Launch Issue and the average sales of 1 or more equivalent Titles (provided that a Distributor may distribute at least 2 copies of the Launch Issue to each Retailer).
For Issues of a New Title subsequent to the Launch Issue, a Distributor will, to the extent such data is available, use EDI sales data to determine the appropriate number of copies of those Issues to be distributed to each Retailer until a regular sales pattern for the New Title is established.

7. Maximum shelf life
A Distributor will ensure that the On-sale Period for an Issue does not exceed twelve weeks unless at least two of the following are applied to the Issue:
a) delayed billing, being the process by which …;
b) Retailers are offered an extra sales margin for sales of the Issue on top of the standard sales margin normally paid by that Distributor to Retailers; and
c) Split Deliveries.

8. Split Deliveries
A Distributor may utilise Split Deliveries for an Issue.
If a Distributor utilises Split Deliveries, the Distributor will ensure that:
a) to the extent such data is available, the Distributor uses EDI sales data to determine the appropriate number of copies of the Issue to be delivered to each Retailer for the second or subsequent deliveries; and
b) based on the rate of sales, if a Retailer has sufficient copies of the Issue available for sale to consumers, then a second or subsequent delivery should does not occur.

Here are definitions from the Code which could be useful reading this:

Closed means, in relation to an Issue, ….

Code means this Distributor Code of Conduct.

Distributor means a person engaged in the business of distribution of Titles and who is a signatory to this Code.

Early Returns means the return of a copy of an Issue, in the case of:

a weekly, fortnightly or monthly Title, during the On-sale Period; and

any other Title, Returned within 30 days from the On-sale Date.

Full Copy Returns means:

the process by which a Retailer returns an entire copy of an Issue to the Distributor; or

the entire copy of the returned Issue,

as the context requires.

Issue means an issue of a Title.

Launch Issue means the first issue of a New Title.

Mastheads means headers, the front cover or the barcode of a copy of an Issue that have been excised from the copy of the Issue.

New Title means any Title that is distributed under a Product Code that has not previously been used.

On-sale Date means, in respect of an Issue, the date, determined by the relevant Distributor, on which the Issue is first made available for sale to consumers by Retailers.

On-sale Period means, in respect of an Issue, the period commencing on On-sale Date and ending on the Recall Date.

Partwork means ….

Product Code means ….

Recall Date means, in respect of an Issue, the date, determined by the relevant Distributor, on which the Issue is required to be withdrawn from sale to consumers by Retailers.

Redistribute means the distribution to Retailers of an Issue that has previously distributed and recalled (using refurbished Full Copy Returns or mint copies of the Issue).

Retailer means a newsagency, supermarket, convenience store or other retailer to which Titles are delivered by a Distributor as a regular distribution channel.

Sales Efficiency means the total number of copies of an Issue sold by Retailers expressed as a percentage of the total number of copies of the Issue distributed to Retailers [averaged over, in the case of:

a weekly Title, four consecutive Issues;

a fortnightly or monthly Title, three consecutive Issues; and

any other Title, two consecutive Issues.]

Split Deliveries means the distribution of an Issue by more than one delivery of copies of the Issue to Retailers during the On-sale Period.

Title means a magazine or similar periodical and, for the avoidance of doubt, excludes books.

Mark Fletcher on March 2, 2015 5:58 AM

We decide who steps foot through the front door of our shops by the pitch in our front window. A windor promoting low margin product will attract low margin shoppers. A window promoting lottery products will attract lottery shoppers. The window promoting higher margin homewares will attract a shower for homewares.

We decide who shops with us and their likely spend based on our front window.

I can’t make that statement often enough to newsagents. Retailers get it as it’s retail 101.

The photo shows the front window from last week at one of my newsagencies. In this display we are pitching good margin funky product to the homewares and gift shopper. It’s part of a cycle of regularly refreshed window displays we are using to attract new shoppers to the business, shoppers who are looking for higher margin gift and homewares lines. It’s working.

This window display is an example of us making conscious choices as to who we want to attract. As I have noted previously, is easier to convert this higher margin shopper to purchase what else we carry than to use traditional newsagency lines to convert to purchasing these items.

Australia Post is dealing with extraordinary disruption and the changes they are seeking could lose votes yet they are essential to the commercial viability of the operation. These challenges are similar to what newsagents face with print media and agency products.

Mark Fletcher on March 2, 2015 5:41 AM

Here’s a letter published in The Land from newsagent Rod King at Bingara, making his case on supermarkets and lotteries. I’m glad Rod wrote the letter and that The Land published it for the argument it makes about excessing supermarket power in Australia. The reach of Coles and Woolworths is, as I understand it, greater than most other supermarket groups in the western world.

While I understand Rod’s argument, it is another example of talking down the channel and that, to me, is a big risk. If Australia really would lose half its rural newsagents in supermarkets got lotteries then the channel is in serious trouble. Surviving on the back of a single product category is no plan for the future in my view.

Mark Fletcher on March 1, 2015 6:19 AM

That’s word for word what I experienced from someone serving in a capital city convenience store last week. There were no pauses, no obvious beginning and end.

The first good one was for me as I picked up my purchase and left. One step to the door I heard the next customer get the same script except for the purchase value. The next customer too.

Fake interest is not good customer service. Rote delivery of catch phrases is not good customer service.

The best retail employees are those who are authentically engaged with customers without spending too long to the disservice of other customers.

By authentically engaged I mean: making eye contact, smiling, saying what they mean to that person at that time and by using sentences and not brief catch phrases like good one – this should have been have a good one meaning have a good day.

I urge newsagents to encourage their employees to be themselves, engage in genuine greetings and not talk from a script. Tell them to ask sensible questions too. In my example, I was asked if I’d had a good day so far at 6:15am. I was in a suit and had clearly not been up all night. But how would the person serving know – they did not look at me.

One of the best ways we can differentiate our businesses is by being ourselves and by not following a tiresome corporate script.

Mark Fletcher on March 1, 2015 6:14 AM

I want people to enjoy my shop even if they don’t make a purchase, I want the visit or even a walk past the front to count for something – a warm feeling, a smile a memory.

I look at the front of the shop as a place for nurturing warm feelings and triggering an emotion. I am certain that if I do this people will notice and from this business will flow. Indeed, this is a factor in our 19% year on year growth – not the only factor, but an important one of many.

So, for sure, product placement is all about pursuing sales. However, I don’t see that road as being direct nor travelled at speed. Let me try and explain that. Take the journals in the photo, they are on display because of the warmth they share. That’s the first step. I know if they work at helping people feel warm or happy then sales will follow. Our placement is thoughtful and peaceful given the nature of the product. They are not cluttered with other product, they are not priced in a gaudy way or to sell on price.

In placing products at the front of the shop I encourage team members to ask – what do we want passers-by to feel? Not, what do we want them to buy? … There is an important distinction.

The more people enjoy what we have on show in our shops the more likely they are to spend and to return. While not always a short or direct road to sales, focussing on feelings is good for business.

Mark Fletcher on March 1, 2015 6:08 AM

Check where you have the Autumn issue of Your Garden. As it’s a quarterly it is easy for people to forget it. I remind them with a placement next to newspapers. One shopper complimented us on reminding them, commenting they would not have known.

Mark Fletcher on February 28, 2015 12:16 PM

It frustrates me when I see a magazine publisher promote that their latest magazine is available at all good newsagents. They control where their magazine goes – or their representative distribution company does.

My message to suppliers: don’t shift judgement of which are good newsagencies and which are not on the basis of where you choose to place your title.

Okay, I accept they are using a cliche without thought. Shame on them and for the judgement they impose in our small business channel.

I caught up with this tweet from the Australian Grand Prix Corporation and responded to them just now: @ausgrandprix FFS! you choose which newsagents get the magazine so you decide which ones are good? Your words could use some work.

Mark Fletcher on February 28, 2015 6:03 AM

I received a call from another newsagent yesterday saying they think they will have to close in a couple of months if things don’t pick up. They are hoping something in their area will improve their situation. I encouraged them to lean into their challenges, to embrace them. I pointed them to my post from two weeks ago: An Urgent Action Plan to Avoid Closure of Your Retail Newsagency.

Some newsagencies are closing which do not need to. The tougher your challenges the more open you ought to be to aggressive change.

Mark Fletcher on February 28, 2015 5:56 AM

I’m flying to the Gold Coast for the day today for the first day of a trade show in another retail channel. This will be my fifth trade show this year and my look at a fourth retail channel outside the newsagency channel. I look for opportunities that can apply to my newsagency business to give me a point of difference. Some trade shows are better than others for the opportunities they present.

As our businesses evolve so, too, must our supplier base. Gone are the days when newsagents can rely on traditional suppliers to provide innovative products through which we can define the relevance of our businesses.

Another aspect that is different outside the traditional newsagency channel supplier is the grant of exclusivity. I like the opportunity of dealing with suppliers who are prepared to respect committed retailers and not bring on another too close to an existing outlet.

At a trade show for a new marketplace you not only see new products, you get to connect with other retailers and learn from their experiences. It’s exciting and challenging all at once.

Mark Fletcher on February 28, 2015 5:52 AM

If we repurpose a floor display unit or a spinner – to hold stock other than that for the brand for which it was originally supplied – we place collateral specific to the new product placed on the stand.

In the photo we have a stand provided for a range of one-shot plush which is now being used for completely different product.

To respect the original brand on the stand and the brand of the ne product, we placed colour strips for the new brand on the shelves over the art of the original brand. This strengthens the impact of the stand and makes it look fit for its new purpose.

There is nothing worse than a stand dressed with original branding promoting an unrelated product now on the stand.

Repurposing floor display units is about much more than putting new stock from another supplier on an old stand.

I’d note that if the stand is supplied on the basis that the initial supplier’s product is always on the stand we respect that.

Mark Fletcher on February 28, 2015 5:48 AM

We have part 2 of the four-part Australia the Story of us from Pacific Magazines in several locations. The newspaper placement works best at driving impulse purchases. That said, we have it with weeklies too. With the TV coverage this is an important title to leverage that and to demonstrate relevance.

Mark Fletcher on February 28, 2015 5:44 AM

We are finding early Easter card customers tend to purchase two or more cards at once. This season, which many retailers ignore, is good – an excellent opportunity for newsagents to pitch their businesses as being the go to card retailers in their area. We have our Easter cards on the lease line and they are attracting shoppers.

Mark Fletcher on February 27, 2015 6:02 AM

Credit Suisse has released their latest analysis of Tatts Group as part of their regular research on public companies. This report is a must-read for all newsagents with lottery products. On page four is this commentary:

Margins continue to expand with internet sales growing about 170bps vs. pcp as a proportion of total turnover (now 10.8%). We expect internet penetration may reach 14% over the next two years, providing about 50bps of margin expansion.

Despite this trend, Tatts will need to grow the dollar value of commissions over time, in our view. Tatts’ agency network is responsible for over 85% of sales and therefore an integral part of its distribution. It would not be in Tatts’ interest to see falling commissions contribute to agency closures.

Here are two comments which should interest newsagents. The first comment on online sales growth needs to be understood by newsagents. The second comment on commission is interesting and something those representing newsagents could leverage.

Mark Fletcher on February 27, 2015 5:54 AM

News Corp. has advised distribution newsagents in QLD of the results of its annual distribution fee review. While not probably as much as some were hoping for, any increase is better than nothing.

Some said that the structure of the fees is a problem, and that distribution newsagents are not keeping up.

In the announcement, News made a couple of other interesting comments on their plans:

News Corp Australia has implemented cover price increases on all of our mastheads in the last 12 months and we intend to continue this in the forthcoming year. This has, and will continue to add additional revenue to the home deliveries and retail side of newsagency businesses.

We will also be continuing our highly successful series of collectable promotions which have generated considerable circulation increases and incremental merchandise sales, along with incremental distribution revenue.

Mark Fletcher on February 27, 2015 5:50 AM

I was surprised to see Dolly magazine on sale for $4 in a newsagency this week. I can’t think of any way Dolly could be offered in this newsagency for this price and be profitable for the newsagent as the common purchase price for newsagents is $5.9625. The $4 price leaves me wondering if there is a deal which was not available to all newsagents. I’d love to hear from others about this.

Mark Fletcher on February 27, 2015 5:39 AM

When choosing gifts for the newsagency I always for for quality first. Price is a secondary consideration. Cheap is rarely the best choice.

Too often I see retailers including, sometimes, newsagents buy a cheap copy of a higher priced better quality product and try and sell it at the price of the higher quality product.

Shoppers are smart. Fool them once and you rarely get a chance to do it again.

My experience is that buying products for the newsagency based on quality works better in the long run.

Take a look at the cheap no name brand stationery from China compared to name brand products. We all have stories about customers buying cheap and complaining. Yet too often I see newsagents drawn to cheap knock-off products. I don;t get it.

At the Gift Fair in Sydney earlier this week I saw this issue play out. In a range of categories there were suppliers of quality product and suppliers of similar looking but considerably lower quality product. One retailer I spoke with said they bought the cheap stuff because that’s what customers want. I doubt that.

Often here I talk about the need for each of us to stand for something in our businesses. While we can stand for selling cheap products, I choose to stand for selling quality products of which I and those purchasing them can be proud.

Mark Fletcher on February 26, 2015 9:06 AM

I have been asked by several people if the newsagent supplier forums I am hosting are in response to the ANF suppliers conference. The answer is no. I was not aware of this ANF suppliers conference until yesterday. I received from the ANF to newsXpress last year about an event it was planning but that event seemed to be more about propping up Newspower and I wrote to the ANF about it at that time. Tower Systems received no invitation. The forums I have planned are attracting a wider base of present day and future suppliers to the channel.

Mark Fletcher on February 26, 2015 5:13 AM

It is inspiring to see through facebook and other forums how newsagents in Tropical Cyclone Marcia affected Far North Queensland have dealt with the disruption, havoc and damage caused. They have got on with it – not only in their businesses but in the broader community, helping others to deal their own personal situations.

While politicians of all colours like to fly in for a photo op, it is small business people like newsagents who do real work in their businesses and communities for the greater good at times like this.

Every newsagent in Australia should be proud of the lets get on with it approach of our FNQ colleagues.

Mark Fletcher on February 26, 2015 5:09 AM

I heard yesterday morning that a business operating two large retail newsagencies in Victoria has gone into voluntary administration. Later in the day I heard from several suppliers who are owed money. As you’d expect they are frustrated.

Often when we hear of businesses in trouble and or closing we hear about the impact on employees and the owners. Little is said about money owing to suppliers to the business, many of which are small businesses themselves.

The impact can flow on to other newsagents.

I expect several suppliers owed money by the two newsagencies now under administration in Victoria will think about whether they should alter accounts processes with newsagents. Trading terms could be shortened, settlement discounts reduced or other changes brought in as a result of another experience.

Newsagents may end up paying a price without knowing it.

As a newsagent and a supplier I look at this from multiple sides. Many retail product suppliers, in a highly competitive marketplace, have cut margins to get business. This leaves them with little room to weather storms – like customers going broke owing money. There is little fat in business in 2015 the collapse of any customer can be most challenging.

The most frustrating situations are those where newsagents aggressively pursue the lowest possible price from a supplier. A loud newsagent committing to sizeable purchases is often given better terms. Suppliers left holding debt if such a business goes broke will feel particularly angry.

Suppliers ought to reward newsagents who pay up front or on time ahead of those who are loud and late at paying.

I feel for the newsagency channel suppliers in pain as a result of the latest collapse.

Mark Fletcher on February 26, 2015 5:04 AM

Another day and more reports from newsagents of magazine distributors sending additional titles which are NOT selling out.

Take a look at this example for Koori Mail – sent to me by a colleague. In the data you can see this newsagent has for all but one issue been experiencing 0% sell through yet the magazine distribution experts at Gordon and Gotch have increased supply by 200%.

The action of Gordon and Gotch on show here are shameful. No wonder newsagents despair about magazines.

I am sure the folks at Gotch will have an explanation. Newsagents are tired of excuses. We want supply based on the data.